The Daily bulletin. [volume] (Honolulu [Hawaii]) 1882-1895, 1887-11-11


writing" or guaranteeing the loan,
and the Hawaiian Treasury
was entitled to the amount
at which the loan was sold
sold in open market by the issuing
house OF Matheson & Co. Now, the
Hawaiian bonds were sold at pre-
MUM of l03 to l05, an average of
l04 being probably correct, accord
ing TO the reports Of the Financial
Agents at that time. Subsequently
these bonds were sold In open mar
ket at l0s, vide Financial Agents
report, November 9Th. With that,
however, the Hawaiian Government
and people have nothing to do;
but they assuredly have to do with
the sale and allotment Of bonds ut a
premium after having paid the synd-
icate commission on guarantee, and
Mr.. Maciarlane is TO be compliment
ed for directing public attention to
the point.
According to this statement the
Financial Agents should have re-
ceived on account OF Loan from the
syndicate 4 per cent premium, or
f20S, 900, instead Of which fl96,-
900 only has been accounted for.
The Minister of Finance, in his
statement to the House the other
day, giving history of the loan trans
action said: "rhe amount of bonds
sold in London and agreed to he de-
livcred to the subscribers thereto
was 100000, for which they paid
SO for each f100 Of bonds, netting
the sum fl96, 900 ut the disposal OF
the Hawaiian Government or their
Financial Agents" Now, in the
light of Mr.. Macfarane's declara-
ton, this statement Of the Minister
of Finance is incorrect and mislead-
ing, unintentionaly no doubt, because
he evidently regarded the Syndicate
as the purchaser of the bonds at 90
as we'll rs underwriting the loan. But
Mr.. T.. &. Macfarlane, speaking
doubtless for the Financial Agent,
says that the Syndicate did not and
could not get any of the bonds, that
in effect its function consisted in
guaranteeing that the bonds would
not be sold for less than SO, for
which a commission of per cent
was charged and paid. 1t follows
therefore that the Hawaiian Treas
ury is entitled to receive every
penny in excess of % which the bonds
brought upon allotment. That was
f20S,000 instead of fl96,O00, as
assuming that the average was lO4.
This is a matter Of calculation, how
ever, which it will be the duty of
the Legislature to make in the in
terests of their constituents, as well
as for the honor and reputation of
its members. If the Financial
Agents have not submitted detail
ed report upon the allotment of
bonds to the Minister of Finance
they should be called upon TO SUBJ
nit one without delay.
OF course one cannot find out
who has retained all of this large
sum OF money, but it appears from
the Intermediate Report of the Min
lister of Finance, Table B., page p,
that the Syndicate kept 2 percent of
it, that is, the difference between SO
and par. Who retained the premium
of 4 per cent can only be conjec-
tured. But it must be clear to any
intelligent person that the Syndi-
cate, which did not buy and could
not get any of these bonds, was not
entitled to discount of 2 per cent
on the bonds, or "a 900, and should be
compelled to disgorge it. Probably
the premium was also retained by
the Syndicate.
There is thus, it will be seen from
Mr.. +. G.. Macfarlane's statement,
which is no doubt correct, a sum of
fl2, 900 or thereabouts, of which
5000 is wholly unaccounted for
and IA 1000 has been wrongfnlly
withheld from the Financial Agents
by the Syndicate. Besides this
there is further sum of Els, 900
in unlawful charges, which the
Financial Agents endeavor to "ring
in'' on the country under cover of a
private note to Mr.. Gibson from Mr..
II. r. Armstrong before the Loan
Act was passed. This note of ex-
PLANTATION is dated August 28, 1856,
and the Loan Act which provided
for the cost of negotiating the loan,
was approved October 10, 1886, two
months afterwards. The intention
and understanding of the Legisla-
ture is embodied in that law, and
by Section 4, if is provided;
Expense floating loan, etc, 100000.
This amount covered every ex-
penditure contemplated in floating
the loan; and the original Loan Act,
approved September /, 1886, is
equally explicit. 1t provides:
Expense floating loan, ETC., $4,000.
1t follows, from what goes before,
that the Legislature should not be
in hurry to pass any bill to legalise
these loan transactions, if indeed
any constitutional measure for that
purpose could be devised in view of
Article 16 of the Constitution, which
reads: "No retrospective laws shall
ever be enacted" Now, a bill to
legalise certain illegal acts by the
Financial Agent is certainly retro
spective legislation, and cannot be